The number of U.S. workers filing new claims for jobless benefits fell sharply last week to the lowest level since January, the government said on Thursday, but the data was distorted by an unusual pattern of automotive industry layoffs that amplified the drop.

Initial claims for state unemployment insurance fell 47,000 to a lower-than-expected seasonally adjusted 522,000 in the week ended July 11, the Labor Department said. Analysts polled by Reuters had forecast claims to be unchanged at 565,000 last week.

A Labor Department official said that far fewer layoffs than anticipated based on past experience in the automotive sector and elsewhere in manufacturing accounted for both the large drop in seasonally adjusted claims last week and in the very steep decline in so-called continued claims.

This was the second week in a row that seasonal factors had affected the data and the official said this would continue for one or two more weeks before this influence faded.

The big drop is not necessarily a reflection of what is going on in the economy, he said.

U.S. stock futures rose after the report while Treasuries trimmed gains, and analysts said that despite the distortions, the claims data were encouraging.

There is really improvement here, even though it's exaggerated by seasonal issues, said Christopher Low, chief economist at FTN Financial in New York.

Continued claims of people still on jobless aid after an initial week of benefits fell to 6.273 million in the week ending July 4, the latest for which data is available.

It was the lowest reading since April and the largest one-week decline on record. Analysts had forecast continued claims would decline to 6.85 million.

The 'seasonal factors' the department uses to adjust the data to provide a better sense of the underlying trends had expected a large increase in both initial and continued claims. Actual claims rose by much less, possibly because workers had already been laid off in the battered automotive sector, and when seasonally adjusted, this generated a large fall.

In another important gauge of labor market health, the 4-week moving average for new claims fell to 584,500 from 607,000, the lowest since January. This measure is closely watched because it is supposed to iron out weekly volatility, and has now fallen for three consecutive weeks.

(Additional reporting by Richard Leong in New York, Editing by Andrea Ricci)